photo by Masterpineapple421/CC BY-SA 4.0 DEED">

'Circular' Economic Development Projects Could Build Common Ground


May 24, 2024

The Pittsburgh Skyline, looking East from the Upper Incline Scenic Overlook, June 28, 2022, <a href="">photo</a> by Masterpineapple421/<a href="">CC BY-SA 4.0 DEED</a>

The Pittsburgh Skyline, looking East from the Upper Incline Scenic Overlook, June 28, 2022

Photo by Masterpineapple421/CC BY-SA 4.0 DEED

This commentary originally appeared on Pittsburgh Post-Gazette on May 24, 2024.

A robust and future-proof regional economy—one with lasting sources of revenue and long-term high-quality jobs—is a goal that virtually everyone in southwest Pennsylvania can agree upon. In the face of climate change, and as the federal government spends billions on new infrastructure projects, many also believe now is the time to invest in “sustainable” economic models.

But there is often disagreement about what constitutes “sustainable.”

This issue came to the fore when our research team at RAND interviewed dozens of stakeholders from organizations ranging from local nonprofits and regional philanthropies to multinational corporations. We were trying to understand which sustainable industries would most benefit the region in economic, social, and environmental terms. But while there are multiple promising opportunities, they weren't all met with equal enthusiasm.

Many believe now is the time to invest in 'sustainable' economic models. But there is often disagreement about what constitutes 'sustainable.'

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Hydrogen Distraction

Take “blue hydrogen” production as an example, which uses natural gas to create hydrogen as an energy carrier. The process also produces carbon dioxide, a gas which contributes to climate change, as a waste. The CO2 thus needs to be captured and permanently stored to make the technology climate-friendly. The U.S. Department of Energy defines blue hydrogen production as “clean” and has funded a pilot Appalachian “Hydrogen Hub” that includes southwestern Pennsylvania.

But blue hydrogen has been met with criticism, such as assertions that the associated CO2 emissions may be worse for the environment than coal or diesel. Others have questioned (PDF) these claims as relying on “poor assumptions” and being “out of line” with other peer-reviewed literature. Arguments also exist about whether blue hydrogen is a “strategic 'lever (PDF)'” for decarbonization and economic growth, or just a “bailout” for the fossil fuel industry.

In short, there's a lack of agreement on whether the benefits of a large-scale regional blue hydrogen industry would outweigh its costs. Attempting to reach a consensus on this issue wastes time and attention—something Pittsburgh can ill afford when historic federal resources are in play.

Embracing Circularity

In contrast, an emerging sector with broad social and political acceptance would allow for coordinated regional branding and investments by local and regional foundations, governments and nonprofits. Further, if the sector created jobs across a spectrum of educational levels—from modest post–high school training to advanced degrees—the region could see an increase in opportunities for all and more fully leverage federal resources that require a focus on equity and environmental justice.

So, which sustainable economic sectors are a good fit for the region's strengths and also avoid cultural or political stalemate? While several could be important, a regional focus on the emerging concept of “circularity” is a winning idea across multiple dimensions.

A “circular economy” is one that reuses products and materials—through recycling, upcycling, or repurposing—to reduce waste, to use less water and energy, and to extract fewer resources from the earth. Circularity can be applied to virtually any part of the economy, but some subsectors might be especially successful in our region. For example, a circular economy focused on the building construction and renovation sectors would take advantage of Pittsburgh's international leadership in green buildings and unique educational opportunities—including training for semi-skilled labor and specialized advanced degrees.

A regional focus on the emerging concept of 'circularity' is a winning idea across multiple dimensions.

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Building on the Past

Circular construction practices could also mitigate the region's problems with aging building stock, a significant portion of which is poorly maintained or beyond repair. Projects like Mill 19 and the Assembly—which have created modern facilities on the bones of historic ones—illustrate this concept applied in a way that explicitly honors Pittsburgh's industrial past. So, growth of a circular building sector could be readily branded to have broad cultural resonance and stakeholder support.

A focus on the circular buildings sector would also allow for relatively modest or incremental financial investments by local and regional private sector, government, philanthropic, and nonprofit entities. And it could provide economic development and jobs throughout the region in both urban and rural settings. With thoughtful planning and investment, it could increase diversity and inclusion in the workforce and enhance equity through social and environmental benefits. And with a foundation in building circularity, the region could spin off additional circular industries in sectors ranging from municipal waste to electric vehicles.

Disagreements about the region's economic development aren't likely to go away. Local business leaders, elected officials, philanthropists, and activists don't necessarily see all opportunities as equally appealing. But there are some that can build a sense of shared purpose and drive economic growth—such as investing in a circular building economy—and these sectors should be a priority.

Aimee Curtright is a senior scientist at RAND with more than two decades of experience in energy, infrastructure, and environmental policy analysis.